Investors‟ Presentation
February 2017
Slide 2
Leading integrated
telecommunications operator in India
with presence across
wireless, enterprise, broadband, pass
ive infrastructure, and DTH
Reliance Communications : Overview
Integrated nationwide network with
~43,000 towers, ~62,000 cell
sites, 190,000 Km optical fibre
network and 1.1 mn sq ft data centre
space
Leading global data
communications business
under GCX, with sub-sea
cable network of 68,698 km
Pan-India operator with long
dated spectrum offering
voice and data across
4G /3G/2G services
Nearly 87 mn total wireless
subscribers including 32 mn
data subscribers of which
~23 mn are 3G / 4G
subscribers
Leading Player in the Indian Telecom Sector
Slide 3
RCOM @ Transformational Stage
CDMA Migration to 4G LTE Successfully Completed
Pan India 4G LTE Services Launched at Minimal Capex & Opex
Consolidation of Wireless Business with SSTL and Aircel
Deleveraging Strategy Under Execution
Stronger RCOM post Corporate Transactions
Contents
Indian Telecom Scenario
RCOM – Growth Strategy
Corporate Transactions – SSTL & Aircel Merger, Tower Sale
RCOM – Post Transactions
Financial Information
Slide 5
Sector consolidation to usher in medium to long term pricing stability
Industry getting Consolidated Among 5 Pan-India Players
RCOM leading the Consolidation Wave in the Industry
Hyper competition led to low
tariffs, impacting viability
Competitive Landscape NowCompetitive Landscape Earlier
11
Operators
5 Operators
Top 5 operators account for >90% of the revenue market share
Regional operators have rolled back operations in select circles, /
consolidated with larger operators / exited
Slide 6
Growth Era in Consumption of Digital Data
Wireless remains the primary
means of data access in India
Negligible wire line broadband
infrastructure in the country, now
being augmented as a part of
GoI‟s BharatNet Project
Only 20% total wireless
subscribers are broadband
internet users
Next generation of subscribers will
demand faster 3G/4G services
Population : 1.25 bn
Total Telecom Subs: >1 bn
2G subs: ~170 mn
3G data subs 120 mn
4G data subs
~ >100 mn
Data subscriber base to grow as Digital services become more common
Source: TRAI
Indian Data Subscribers – A Very Large Opportunity
Slide 7
1. Cost of Device: entry level price
• 3G : $ 225
• 4G : $ 45
2. Network
• 3G : 10% population coverage with poor
indoor coverage
Average speeds of 2 ~ 3 Mbps due
to poor backhaul
• 4G : 80% population coverage with best
indoor coverage
Average speed of 15 ~ 20 Mbps
with most sites fiberised
3. Tariff / Affordability
• 3G : 2x of 2G data pricing and 1.4X of
ARPU
• 4G : Lower than 2G
4G adoption will be 5x faster than 3G
Factors for Higher Adoption – Comparison of
industry-wide status at the time of launch of
services
Faster growth in 4G data adoption to compensate the falling voice revenues
Slide 8
India will leapfrog from 2G to 4G
Digital Lifestyle
Content and Services Technology
Contents
Indian Telecom Scenario
RCOM – Growth Strategy
Corporate Transactions – SSTL & Aircel Merger, Tower Sale
RCOM – Post Transactions
Financial Information
Slide 10
800Mhz
1800Mhz
2300Mhz
2500Mhz
Incumbent
1
Incumbent
2
Incumbent
3
800Mhz Spectrum with one of the Largest 4G network in
the country & one of the largest globally
RCOM‟s Spectrum Advantage – for Indoor Coverage
RCOM‟s Distinct Advantage – 800Mhz Spectrum + Network Coverage
Slide 11
Others
RCOM
800/850 MHz Spectrum can penetrate deep indoors where over 75% of
data consumption happens
800/850 band is to 4G era, what 900 band was for 2G era
800/850MHz : The In-Building Champion
800Mhz Spectrum - Better in-building Signal Strength
Slide 12
Nationwide Spectrum Sharing Arrangements Completed
Shared spectrum arrangements to yield spectral efficiency advantage
RCOM‟s access to Jio‟s state-of-the-art 4G network
Ample spectrum in 18 circles* :
>=10MHz in 11 circles and 8.75MHz in 7 circles
Spectrum and Network Sharing Agreements with Jio
* Jio‟s 800/850 MHz spectrum acquisition in Oct‟16 auction not included; Post merger with SSTL.
Distinct sub-1 GHz Spectrum Advantage
Slide 13
One of the largest network
globally, at launch, with pop
coverage ~80%
~18,000 cities and
~2,00,000 villages
Network with Macro cells and
Small cells, and IBS backed by
fiber network over 250,000 Kms
Ubiquitous & State-of-the-Art 4G Network
Strong Backhaul Capacity
Slide 14
RCOM WayOld Way
Voice + Data + VAS plan Single Recharge
Only connectivity plans Content + Connectivity
Physical channels Electronic and Online
Paper based forms e-KYC
Call centers Instant multi-channel support
RCOM Ready To Serve The Internet Generation
Slide 15
Unlimited Voice
Aggressive 4G Data
Discounted Tariffs
1
2 3
RCOM Strategy To Protect and Grow Subscriber Base
Slide 16
16
1
No Handset Limitation, Invitation To All 2G / 3G / 4G Handset Owners
Target Segment
Voice Users
Product Features
Unlimited on-net calls
Fair usage off-net calls
28 days Validity
300 MB Data
INR 149 Product with
unlimited on-net calls and
300 MB 4G Data
RCOM Strategy To Protect and Grow Subscriber Base
Target Segment
Migrants
STD users
Product Features
20p Tariff
28 Days Validity
500 MB Data
INR 19 Product with INR 0.20
for all calls
INR 99 product offering 1 GB
4G data
2 3
Target Segment
Youth / College Students
Young Executives
Product Features
1GB 4G Data at
competitive price in the
industry
Built in tariff of INR
0.20/min for all local &
STD calls
Slide 17
“Reliance 4G” Content Led Offerings
RCOM to offer content services as the market moves from “dumb data” to more “smart data
based plans”
RCOM offers a wide range of content - movies, music, games and mobile TV
GBs
From today’s ‘Dumb Pipe’
based Data Plans
‘Smart Pipe’ based
Data Plans+movies music games mobile TV
GAMES ARCADE
GBs
Dumb Data to Smart Data
Contents
Indian Telecom Scenario
RCOM – Growth Strategy
Corporate Transactions – SSTL & Aircel Merger, Tower Sale
RCOM – Post Transactions
Financial Information
Slide 19
SSTL Merger - Overview
RCOM to acquire SSTL‟s operating wireless business
RCOM to acquire most valuable and superior 800 / 850
MHz band
RCOM to extend validity of 800 / 850 MHz band
spectrum in 8 key circles
Consideration to be paid in RCOM stock and liability of
DoT installments for SSTL spectrum payable over 10
years
RJ
WBGJ
KT
KLTN
UP-WDL
KO
SSTL Coverage Circles
RCOM Spearheading Consolidation In Indian Telecom Sector
Stock Exchanges Scheme Approval
Received
CCI (Competition Commission of India)
approval received
The Members of the Company and SSTL
shareholders duly approved the Scheme
High Court Approvals Received
DoT approval expected
soon
Consolidation
Transaction Completion – Key milestones
Slide 20
Aircel Merger– Overview
Wireless business of RCOM to be combined with Aircel Ltd. through court approved process
of demerger
RCOM and Maxis Communications Berhad (MCB) to hold 50% each in „MergedCo‟ with
equal representation on board and committees
MergedCo to rank amongst the top operators in India on customer base and revenues
MergedCo to rank amongst top 3 operators by revenues in 12 important circles
Strong spectrum portfolio across India having 850, 900, 1800 and 2100 Mhz bands, with 2G,
3G & 4G operations across the country, especially strengthened by the sub-1 GHz spectrum,
850MHz spectrum, available across all the circles for offering the fast growing 4G service in
India
RCOM Leading The Consolidation Wave In Indian Telecom Sector
Slide 21
Aircel Merger– Overview...contd.
Transaction will reduce RCOM debt by INR 20,000 crore (US$ 3 bn) or over 40% of total debt
MergedCo to rank among top corporates in India with assets of INR 65,000 crore
(US$ 9.7 bn) and net worth of INR 35,000 crore (US$ 5.2 bn)
NPV of capex and opex synergies estimated at ~ INR 20,000 crore (US$ 3 bn)
RCOM will continue to own and operate its high growth businesses in the domestic and
global enterprise space, Data Centers, optic fibre and related telecom infrastructure, besides
owning valuable real estate.
Transaction Completion – Key milestones
CCI approval expected soon
Stock Exchanges„
approval expected soon
Subsequently, Scheme to be filed with National Company Law Tribunal
(“NCLT”)
Post NCLT approvals, final approvals would be taken
from Department of Telecommunications (“DoT”)
Merger
Slide 22
3G – in 18 circles
13
18
RCOM Combined Entity
2100 MHz 3G Spectrum (No. of Circles)
10 MHz spectrum in 2100 MHz band in 8
Circles
4G - Pan-India capability
2G – Pan India & Better Coverage RCOM „s1800MHz spectrum renewal pushed
to CY26
Pan India 4G capable spectrum in 800 MHz
band
All Metros, A and B Circles have 5 MHz+
Spectrum in 1800 MHz band for possible 4G
rollout in 1800 MHz band
4G arrangement with Jio to continue
5
10
RCOM Combined Entity
Residual Spectrum Life in 14 Circles in 1800 MHz Band (Years)
14 circles (Metro, A‟ & B‟ circles except MP and WB)
Combined network would improve
nationwide coverage
The merger will help in filling GSM coverage
gaps in West Bengal, Bihar, and
Assam, where RCOM did not renew its
900MHz spectrum
Aircel Merger – Spectrum Capability
Unique Spectrum Capability across bands for Pan India Wireless Broadband play
Slide 23
Largest standalone tower portfolio in India with a single controlling
shareholder1
Best positioned passive infrastructure player2
GBT Heavy Tower Portfolio – Higher Tenancies and Better Range3
High quality cell sites built to support tenancies upto 4x and beyond4
Best suited to attract data led tenancies5
Established anchor tenants6
De-risked model with long term business visibility7
Successful track record of increasing 3rd party tenancies8
Experienced Management Team10
Reliance
Tower Assets
Key Highlights
Sale Of Tower Business At An Advanced Stage
Tower Sale – Business Overview
Slide 24
Tower Sale – Key Highlights
RCOM signed Definitive Agreements with Brookfield for sale of its Telecom Towers Business
RCOM will receive an upfront cash payment of ~INR 11,000 crore (~US$ 1.7 bn) from the proposed
transaction
RCOM will also enjoy 49% future economic upside in the towers business, based on certain conditions
RCOM intends to utilize the proceeds of the proposed transaction solely to reduce its debt
Brookfield is a leading global alternative asset manager with assets over US$ 250 bn
Brookfield has a history of more than 100 years of owning and operating real assets with a focus on
property, renewable energy, infrastructure and private equity
Brookfield has presence in ~30 countries around the world
About Brookfield
Proceeds To Be Used For Deleveraging
Transaction Completion – Key milestones
CCI approval has been applied
for
CCI approval
Tower business demerger scheme filed
with NCLT
NCLT approval
Demerger &
Sale
Contents
Indian Telecom Scenario
RCOM – Growth Strategy
Corporate Transactions – SSTL & Aircel Merger, Tower Sale
RCOM – Post Transactions
Financial Information
Slide 26
Cash flows of remaining businesses are
annuity-like and sticky in nature
Enterprise and Data Centre – sticky and
stable customer contracts; most of the
revenue under contracts
OFC – inherent business capacity and long
term contracts
GCX – the emerging market‟s largest and
highest capacity subsea cable system
Real estate – long term lease arrangements
/ monetisation opportunities
Global Operations
Subsea cable
Private Line
Enterprise
Data Centers
Broadband
Domestic Leased Line
Carrier Business
NLD Data
B2B Business
Direct To Home (DTH) business
B2C Business
Fiber To The Home business
RCOM – Post Transactions
Office Centrex
MPLS and VPN
Business Internet
IP Services
Managed Network Services
Stakeholding
Indian Operations Global Operations
National OFC Network
49% Economic interest in Tower Company
50% equity stake in Merged Wireless Entity
Slide 27
Voice Data Connectivity Collaboration Services Data Center
Product Portfolio
PRI
Centrex
Similar Board Number
One Office Duo
Toll Free Services
Intelligent Telephony
Business Internet
Leased Line
IPLC
MPLS VPN
Managed Services
Video Surveillance
Audio Conferencing
Video Conferencing
Unified Communications
Colocation
Managed Hosting
IT Infrastructure
Cloud Services
Operations in 180 cities in India, 1.1mn+ buildings connected directly to network, serves nearly 1.2mn access lines
Integrated ICT player with a comprehensive product range of 38+ enterprise voice, data, video, internet and IT infrastructure
services
Our enterprise clientele includes over 39,000 Indian and multinational corporations including SMEs and many prominent
enterprises in India
MPLS / VPN
Internet
DLC
Toll Free
Data Center
1
2
3
4
5
Enables calls free of cost to end user
Key demand from Services, BFSI, IT, ITeS
Point-to-point private line communication domestically
Provide access to organization's network using public telecom infrastructure
Dominant growth driver of the enterprise data market
Critical to integration of IT and telecom infrastructure
Co-location
Cloud Offerings
Key Services
India Enterprise Business: Overview
Slide 28
Largest footprint of Data
Centers across India with ~1.1
million sq.ft of gross data
center space, including one
IDC under construction
Hosting 7,000+ servers racks,
300+ firewalls and 1,600+
terabytes of storage capacity
Modular and high capacity
design
Ring topology designed for
the Data Center with each
fiber capable of terabit
capacity
Fiber & Cat 6 cabling to the
customers‟ racks and
cabinets within the Data
Center to meet future traffic
growth
Tier III+ Data Center and
redundancies in all critical
equipments
Multiple DR site availability
across metro cities
Carrier neutral option to
choose any BSO for point-to-
point connectivity
All Data Canters are ISO
9001:2008, ISO 20000-1:2005
and ISO 27001 certified
5 levels of security
Data security
Deployment of Firewall, anti-
spam, anti-virus, IPS, secure
VPN etc. to safeguard data
Network Operations Center
(NOC)
Two Centralized NOCs
24/7 monitoring and fault
tracking of network
National backbone
1,90,000 Km nationwide
optical fiber backbone
DWDM core, SDH on access
Each fiber capable of terabit
capacity
Multiple ducts laid in the
backbone
MPLS IP VPN backbone of
high core capacity, with
Metro Ethernet services
Fiber to the building in ring
topology
Scalability Reliability & Security Connectivity
Data Center Business: Overview
Slide 29
Intercity Fiber Network : ~120,000 Kms
Intra-city Fiber Network : ~70,000 Kms
Fiber easily upgradable to lit 100/400G Bandwidth
Access to Buildings and households
Headroom in Fiber, Duct infra to create further capacities
RCOM has an extensive fiber operation setup being managed by Ericsson
The fiber network has one of the best availability parameters such as
Faults per thousand Km
Low DB loss /Km to support 100 G Long haul lit routes
National Footprint of Connected Buildings
Fiber Network
Optical Fiber Cable Business : Overview
RCOM‟s Optical Fiber Footprint Is Future Ready For Data Explosion
Slide 30
Hosting
IP Transit
Transmission Services
Private Line
Ethernet
IP Services
Managed Network
Managed Security
Managed Unified
Communications
Retail
Manufacturing
Logistics
Financial Services
Business Services
Infrastructure Solutions Connectivity Solutions Managed Network Solutions Industries
Product Portfolio
One of the leading global data communications service providers with one of the largest global subsea cable and terrestrial
networks
Owned Subsea cable systems with a total length of 68,698 route kilometres and landed at 46 landing stations in 27
countries
Scalable global IP and multi-protocol label switching (“MPLS”) network provided over 27 diverse owned and leased
international subsea and terrestrial cable routes with 836 direct inter-connections to 342 third party networks
Infrastructure
Solutions
Connectivity
Solutions
Managed
Network
Industries
1
2
3
4 Expertise and capabilities to build innovative, commercially attractive solutions backed by
outstanding managed services and Service Level Agreements to give edge within industry
Outsourced solutions aimed primarily at enterprises who expertise is in their own business
rather than networking and IT
Layer 1 infrastructure and bandwidth
Carrier class capacity; Colocation power and cooling
Dedicated end-to-end global connectivity solutions for both enterprises and network operators
that can be delivered wires only or with simple managed service
Key Services
GCX Business: Overview
One Of The Largest Global Subsea Cable And Terrestrial Networks
Slide 31
Nationwide network with 190k Km
optical fibre and 1.1mn sq ft data
centre space – one of the largest
among the private players
Stake in consolidated Wireless
business more valuable than the
current Wireless business
Deleveraged balance sheet
providing value for
shareholders & lenders
Asset Light Business
Leading global data
communications business
under GCX, with sub-sea
cable network of 68,698 km
Stable Business With Improved Credit Profile
Strengths of RCOM Business Post-Transactions
Contents
Indian Telecom Scenario
RCOM – Growth Strategy
Corporate Transactions – SSTL & Aircel Merger, Tower Sale
RCOM – Post Transactions
Financial Information
Slide 33
Results – 2Q FY17 and 3Q FY17 (Snapshot)
Key Financials
In INR croreQtr ending
Sep 2016
Qtr ending
Dec 2016
Particulars 2Q FY17 3Q FY17
Revenue 5,142 4,922
EBITDA 1,542 1,206
EBITDA margin 30.0% 24.5%
PAT 39 -531
India Operations 4,488 4,267
- Voice 2,791 2,486
- Non-Voice 1,573 1,591
- Others 124 190
EBITDA 1,297 957
EBITDA margin 28.9% 22.4%
Global Operations 1,089 1,132
- Data 744 712
- Voice 345 420
EBITDA 245 249
EBITDA margin 22.5% 22.0%
In US$ MnQtr ending
Sep 2016
Qtr ending
Dec 2016
Particulars 2Q FY17 3Q FY17
Revenue 772 725
EBITDA 231 177
EBITDA margin 30.0% 24.5%
PAT 6 -78
India Operations 674 628
- Voice 419 366
- Non-Voice 236 234
- Others 19 28
EBITDA 195 141
EBITDA margin 28.9% 22.4%
Global Operations 163 167
- Data 112 105
- Voice 52 62
EBITDA 37 37
EBITDA margin 22.5% 22.0%
2QFY17: 1US$ = INR 66.62
3QFY17: 1US$ = INR 67.93
Slide 34
Revenue & Profitability: Q-o-Q down due to-
• Unprecedented competitive intensity
• First full quarter post shutdown of profitable CDMA business
• Increase in amortisation and interest expense aggregating INR 278 crore (US$ 41 mn)
on account of capitalisation of 850 MHz spectrum liberalisation fee
India Operations:
• Voice revenue impacted due to discounted tariffs in the industry
• Non-Voice improved due to improved performance by non-wireless businesses
Global Operations:
• Improved due to addition of new clients and expansion of revenue with existing clients
• Stable business
Results – 2Q FY17 and 3Q FY17 (Performance Review)
Q-o-Q Performance Review
Thank You
Slide 36
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statements include, but not limited to, risks and uncertainties, regarding fluctuations in earnings, our ability to manage growth, competition, our ability to manage our
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